An Analysis Of The Development Of China's Bank Card Industry Based On Industry Life Cycle Theory

According to the latest payment system data of 2010 released by the People's Bank of China, there're 25.756 billion volumes and 246.76 trillion yuan of bank card payments in the whole year. The penetration rate of bank card reached 35.1%. Bank card as an electronic means of payment is progressively deepening into all areas of our daily life. The development of bank card industry can promote not only the development of financial industry but also the development of the retail markets and the entire national economy. International experience shows that every 10% increase of the penetration rate of bank card can stimulate 0.5% to 0.8% of the GDP growth. Therefore, there are lots of problems in China's bank card industry that we should research into. Such as which phase of industry life cycle it's currently in, what are the differences between the mature bank card industry and that of China, what are the appropriate policies we should take in current stage and so on. Firstly, based on the industry life cycle theory, this paper aims to analyses the bank card industry life cycle in typical countries, the causes and the characteristics of each phase. Besides, it also makes an identification of China's bank card industry life cycle stage and an analysis of the characteristics of current phase. At last, it gives several suggestions in those foundations in order to promote the development of China's bank card industry. All in all, this paper can be divided into three main parts.The first part consists of the first chapter (Introduction) and the second chapter (Briefing of China's bank card industry). On one hand this part describes the relevant researches of bank card industry of domestic and foreign areas, gives a brief introduction of the industry life cycle theory, the shape of the curves and the methods of identification. On the other hand it gives a brief overview in China's bank card industry, the operating mechanism and the importance the industry made for the whole national economy.The second part is the main part of this paper, including chapter three (The bank card industry life cycle of typical country: A case of the bank card industry of America) and chapter four (An analysis of the phases of China's bank card industry). In chapter 3, the paper confirms the existence of life cycle of bank card industry on the basis of analysis of the America's bank card industry which is recognized mature. Then this chapter makes an exploration of causes and characteristics of each stage. Also verifies the industry life cycle model which selected could fit the bank card industry well and can be used for the further researches. In chapter 4, the paper identifies the current life cycle phase of China's bank card industry with not only qualitative analysis method but also quantitative analysis method and draws a conclusion that the industry was in the initial stage of development before 2006, and it is in the rapid growth stage since 2006. Then the paper makes an analysis of the characteristics of China's bank card industry current stage from the angles of card market, acceptance market, business size, industry innovation, legal system and industry internationalization. Finally, taking Pearl Curve as the prediction model and bank card transaction value as the prediction indicator, the paper predicts the development of China's bank card industry life cycle under different indicator saturation values. It reached the conclusion that the saturation value is larger, the growth and the maturity periods are longer and the recession period would arrivals later.The third part is chapter five (Countermeasures and suggestions of China's bank card industry development at this stage). Because the development of bank card industry has a huge positive effect on the whole national economy, it is important to expand the industrial scale in order to achieve the goal of extending the growth and the maturity periods. On the basis of summing up the main factors of pushing America's bank card industry developments, in view of China's current industrial situations, the paper presents countermeasures and suggestions as fellows: First, adjust the internal structure of the industry appropriately; Second, make more efforts to improve the acceptance market; Third, raise the level of industrial specialization; Fourth, go deep into the implementation of industry internationalization strategies; Fifth, promote the constructions of the legal and the institutional systems.